It could be a problem for the company.
The Federal Communications Commission's announcement this week that Musk's space venture won't receive almost $900 million in promised subsidies for its Starlink satellite internet business is a huge blow to the billionaireentrepreneur.
The FCC chairwoman said that the company failed to demonstrate that it could deliver the promised service.
She said that Starlink's technology has promise. The question before us was whether to publicly subsidize its technology for consumer broadband, which requires that users purchase a $600 dish, with nearly $900 million in universal service funds until 2032
The grant was handed out in December of 2020. Critics accused Pai of mismanaging the auction and sending funds to the wrong areas as part of the Rural Digital Opportunity Fund.
A major hole has been left in SpaceX's efforts to roll out its global internet service after the company's application for the almost $1 billion boost was turned down.
It's important to remember that Starlink is the core of Musk's vision for the company, to the degree that he explicitly mentioned the service in a leaked email last year.
Helping Musk succeed isn't the federal government's job.
We are rejecting these applications. The consumers deserve reliable and affordable high-speed broadband. As we move into a digital future that demands more powerful and faster networks, we need to put scarce universal service dollars to their best use.
She said that they can't afford to subsidize ventures that aren't likely to meet requirements.
It's another blow for Musk, who has been mired in a chaotic and expensive mess of his own making as of late.
The news came after it was revealed that Musk sold almost $7 billion of his shares in the company in case he had to pay more for the social networking site.
A prototype booster went up in flames last month during the development of the giant Starship spaceship.
Despite remnants of a Russian anti-satellite weapons test careening into a close call with hundreds of the company's satellites, the company's attempts to build a global satellite network have made significant strides.
Over 2,500 satellites have been sent into low- Earth orbit by the company. On Wednesday, the company was able to deliver another 52 of the small micro-satellites using its workhorseFalcon 9 rocket.
It's not clear how significant the FCC setbacks will be.
Losing out on almost $1 billion is going to sting.
Starlink received an $886 million grant from the FCC, which was canceled due to mismanagement.
There are more on Starlink.